Who’s Not Getting U.S. Contracts

Federal procurement centers with the biggest bucks to spend on outside goods and services are the least likely to buy anything from the nation’s small businesses.

That’s the finding of a just-released study by the Small Business Administration’s Office of Advocacy, which shows that small firms aren’t getting their mandated share of the federal tax dollars spent in the private sector.

Government guidelines urge federal agencies to spend at least 23% of their prime contracting dollars with small businesses. But the government’s biggest procurement centers, which accounted for two-thirds of the $182 billion spent on contracts of more than $25,000 in 1998, spent only about 6.3% of that with small firms on average. Overall, the nation’s small businesses were awarded $33.2 billion in prime contracts, or about 18.3% of the 1998 total, according to the study.

That’s actually an improvement from the early 1990s, when small business garnered just over 15% of federal prime contracts worth more than $25,000, according to Bruce Phillips, director of research for the Office of Advocacy.

But he warns that those gains are not broad-based and says trends such as bundling are making it tougher for the average small company to do business with the federal government.

“Things are getting better for a tiny percentage of small firms and getting worse for the vast majority,” Phillips said. “A lot of procurement centers aren’t doing a very good job of reaching out to small business. We want to call that to their attention with this report.”

In an attempt to boost the procurement numbers, the SBA has launched a pilot program to help “very small businesses” with fewer than 15 employees get first crack at federal contracts under $50,000.

The set-aside program, announced last fall, is now gearing up in 10 SBA districts, including Los Angeles and Santa Ana.

Contracts to be awarded would come from every federal agency in those regions, from Veterans Affairs facilities to the Justice Department to military bases.

“There is more out there [in the way of contracting opportunities] than many people believe,” said Deborah Hurley, procurement specialist with the SBA Office of Government Contracting.

The SBA will host two area forums to provide entrepreneurs with more information about the program. The Santa Ana district, which includes Orange, Riverside and San Bernardino counties, will have its meeting May 27 from 10 a.m. to noon at La Habra City Council Chambers, 201 E. La Habra Blvd., La Habra. The Los Angeles district, which includes Los Angeles, Santa Barbara and Ventura counties, will have its forum June 4 from 9 to 11 a.m. at the CalFed bank building, 201 W. Lexington Drive, Glendale.

For more information about the forums or the program, contact Deborah Hurley at (818) 552-3218.